Study: 10% growth in crypto market cap reduces value of African firms by 0.76%

04/02 10:45

According to the findings of a study undertaken by Mina Sami and Wael Abdallah, each time the cryptocurrency market cap grows by 10%, there is a corresponding 0.76% drop in the market value of African micro-entities. The study findings also suggested that firms in less competitive sectors are “more likely to get hurt by the cryptocurrency market’s expansion.” For instance, the two authors conclude in their report that the cryptocurrency market has “a considerable effect on Africa’s energy, financial, industrial, and consumer services sectors.” In contrast, the real estate and the information technology sectors are less affected by the growth of the crypto market, the authors said. Meanwhile, the authors claimed that their study has highlighted the importance of having “internal strategies and firm experience.” These attributes are vital for African firms that must now compete with cryptocurrencies. Although the authors — who are also assistant professors at AUC — have acknowledged the steps taken by countries to counter the growth of the cryptocurrency market, they argue, however, that such steps have in fact “failed to protect their domestic firms.” According to the authors, this failure calls for interventions by governments that “improve the financial market’s competitiveness in Africa.”
bullishbullishbullish2bearishbearishbearishBearishLikeShare
DisclaimerThe content above does not represent HTX's positions.HTX does not provide any trading recommendations.

Related Articles

  • Image

    Bitcoin’s Institutional Footprint Expands Exponentially Across Markets – Here’s How Much They Hold

  • Image

    Analyst Says Ethereum Will Have Its Turn For An Explosive Rally, But Only When Bitcoin Does This

  • Image

    Wintermute Sounds Alarm: Bitcoin Surge A Short Squeeze, Not Sustainable Growth

All Comments0LatestHot

avatar
LatestHot

Related Articles

  • Image

    Bitcoin’s Institutional Footprint Expands Exponentially Across Markets – Here’s How Much They Hold

  • Image

    Analyst Says Ethereum Will Have Its Turn For An Explosive Rally, But Only When Bitcoin Does This

  • Image

    Wintermute Sounds Alarm: Bitcoin Surge A Short Squeeze, Not Sustainable Growth